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June 19 — The Environmental Protection Agency's top air official told a House subcommittee June 19 that the agency has the legal authority under a little-used section of the Clean Air Act to issue a proposed rule to curb carbon dioxide emissions from existing power plants.

“What we've done with this rule is completely within the four corners of” Section 111(d) of the Clean Air Act, Janet McCabe, the EPA acting assistant administrator for air and radiation, told the House Energy and Commerce Subcommittee on Energy and Power.

House Republicans pressed the EPA to explain its legal authority to set statewide emissions rates for existing fossil fuel-fired power plants during the first of a series of hearings planned for the proposed rule.

Subcommittee Chairman Ed Whitfield (R-Ky.) said the EPA previously has issued performance standards under 111(d) that required emissions reductions at the facility level rather than at the state level.

“EPA has never been this extreme under 111(d) before,” Whitfield said. “Instead of the states establishing a performance standard for units within the source category, EPA is now dictating to the states the level of emissions reductions states must meet.”

Upton Questions Energy Authority

Rep. Fred Upton (R-Mich.), chairman of the full Energy and Commerce Committee, also questioned whether the EPA's proposal violates the Federal Power Act, which reserves to the states the authority to regulate their power sectors. Upton called the EPA “an agency with no energy policy expertise and with questionable statutory interpretation.”

McCabe argued the power plant proposal isn't an energy plan. Instead, the EPA has established emissions rates for carbon dioxide that states can meet however they choose.

The proposed carbon dioxide standards for existing power plants (RIN 2060-AR33), published in the Federal Register June 18, would establish unique carbon dioxide emissions rates for the power industry in each state (79 Fed. Reg. 34,830).

The EPA anticipates its proposal could reduce carbon dioxide emissions from the existing fleet of power plants by 30 percent from 2005 levels by 2030 at a cost to the power industry of $5.4 billion to $8.8 billion. The proposal could reduce retail electricity bills by 8 percent as states and power companies invest in measures to reduce electricity demand, according to EPA.

Benefits of Rule Questioned

House Republicans also questioned what impact the power plant proposal would have on the climate if other countries such as China and India don't take similar steps to curb their greenhouse gas emissions.

Rep. David McKinley (R-W.Va.) asked McCabe whether the EPA would insert a provision into its rule voiding the requirements if other countries fail to follow the lead of the U.S. or if the rule could be shown to harm the economy. McCabe said that sort of provision wouldn't be appropriate under the Clean Air Act.

Reps. Joe Barton (R-Texas) and Lee Terry (R-Neb.) said officials from their states have already expressed concerns about their ability to achieve the emissions rates being proposed. Barton said the EPA's proposal would require existing fossil fuel-fired power plants in Texas to achieve an emissions rate below what the agency has proposed for the newest, most-efficient natural gas plants.

Toxics Rule Bars Plant Proposal

House Republicans also questioned whether the EPA has the legal authority to regulate carbon dioxide emissions from the existing power plant fleet after it has already issued air toxics emissions standards for the plants under Section 112 of the Clean Air Act.

Conflicting amendments to Section 111(d) passed in 1990 as part of the updates to the Clean Air Act could prevent the EPA from regulating carbon dioxide emissions from the existing power plants because it has already issued standards for those facilities under Section 112 of the act.

The amendment passed by the House prevents the EPA from regulating under Section 111(d) any industrial source that was already regulated under Section 112. The Senate amendment only prevents the EPA from regulating the pollutants listed under Section 112(b) under Section 111(d) rather than limiting the agency's authority to regulate industrial sources.

Cites Clean Air Mercury Rule

McCabe said the EPA was relying on the same interpretation of its Section 111(d) authority that it used to issue the Clean Air Mercury Rule in 2005.

As part of that rule, the EPA said the statutory language was ambiguous and determined that the amendments were only intended to bar the EPA from regulating the pollutants listed under Section 112 in a rule issued under Section 111.

“What EPA is hanging its hat on is a scrivener's error in a conforming amendment. Really?” he told McCabe.

Lawsuit Filed

Meanwhile, Murray Energy Corp. filed a lawsuit June 18 asking the U.S. Court of Appeals for the District of Columbia Circuit to block the EPA's carbon dioxide proposal, arguing the agency has already regulated power plants under Section 112 of the Clean Air Act (Murray Energy Corp. v. EPA, D.C. Cir., docket number unavailable, 6/18/14).

Senate Republicans also have expressed opposition to the EPA's proposed rule.

Sen. David Vitter (R-La.), the ranking Republican on the Senate Environment and Public Works Committee, asked committee Chairman Barbara Boxer (D-Calif.) in a June 18 letter to convene a hearing to discuss the possible economic impacts of the EPA's proposal.

“The American people should not be kept in the dark regarding the details and consequences of the actions this administration is taking under the guise of controlling our climate—actions that have the potential to negatively impact employment, job creation and our national debt without any material benefit to the climate,” Vitter said in the letter.

To contact the reporter on this story: Andrew Childers in Washington at achilders@bna.com

To contact the editor responsible for this story: Larry Pearl in Washington at lpearl@bna.com

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